Consumer Debt Collections Rights

• When you miss credit card payments, penalties and late fees apply based on contract terms. Once a debt is in default, the account goes into collections and creditors attempt to collect in earnest. Debt collectors may contact you by phone or mail, but they cannot harass you or lie to you. They may contact people you know in an attempt to locate you, but they cannot tell anyone but you or your spouse about the debt. You may dispute the debt or send the creditor a request to stop communicating with you about the debt. By Texas law, creditors must cease collection attempts after receiving the request except to make a final settlement offer, verify that they received the letter or to notify you of impending legal action.
  
  

Lawsuits

• Debt collectors can sue for outstanding credit card debt in Texas. Respond to a lawsuit as ignoring the situation may result in a debt collector automatically winning the case. Reply to the summons and supply proof if you intend to deny the debt or claim financial hardship. If you lose the case, the court may garnish your bank account for the amount owed. However, Texas law prohibits wage garnishment and protects your home, vehicle and most of your possessions from liens due to credit card debt. If a debt collector threatens to take your possessions, garnish your wages or any other unlawful collection activity, file a complaint with the Texas Attorney General's Office or the Federal Trade Commission.
  
  

Statute of Limitations

• Texas applies a statute of limitations of four years for credit card debt. The four years begins when the last action on the account occurs, such as defaulting on the agreement or the last payment date. The statute of limitations does not absolve you of debt; it does, however, protect you from being sued beyond the four-year mark. Claiming the statute of limitations is a legitimate defense in court.
  
  

Considerations

• Regardless of protections, valid debt remains collectible, and your credit report will reflect defaults and delinquencies. Credit card delinquencies remain on your credit report for up to seven years after the default. Negative information on the report may hinder future lending opportunities, including denial of credit or less favorable interest rates.